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Paramount's Charter carriage talks hang over Skydance deal

Illustration of a television with static leaking out of it as if it were a liquid.

Illustration: Aïda Amer/Axios

Paramount's latest hurdle as it seeks its $3 billion deal with Skydance is securing a long-term carriage agreement with Charter, the country's largest TV provider.

Why it matters: Paramount's value would be significantly weakened if its linear TV networks are dropped by Charter, or renewed at a lower rate.

The latest: Paramount and Charter agreed to extend negotiations on a new long-term contract past the expiration of the two's current carriage agreement, which was set for midnight Tuesday, a source with knowledge of the talks tells Axios.

  • Both Charter and Paramount declined to comment on the state of the talks.
  • A short-term extension is typically viewed as a signal that a long-term deal is close.

The big picture: Paramount still very much relies on its linear TV business to drive revenue and buttress its money-losing streaming business. Traditional TV still makes up two-thirds of Paramount's overall revenue.

  • Charter is the country's top cable provider, with 13.7 million subscribers.

Flashback: Charter's high-profile dispute with Disney last year reset the roadmap for carriage deals between programmers and distributors.

  • Charter won the ability to offer some Disney streaming services to its customers at either no or a reduced extra charge, while Disney secured a higher fee for its content.
  • In the process, Disney agreed to drop some of its cable channels, including Disney XD, FXX and Freeform.
  • The decline of cable TV has turned cable networks like MTV and Comedy Central into more of a liability than an asset these days.

Context: Paramount ousted CEO Bob Bakish on Monday after a falling out with controlling shareholder Shari Redstone. The company is currently being led by a triumvirate of division heads forming an "Office of the CEO."

  • That should not affect deal talks too much, as those talks are being led on the Paramount side by Ray Hopkins, president of U.S. distribution, Puck reports.
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